Oil futures down on US stockpile report, Brexit concern

TOKYO – Oil prices fell in early Asian trade on Thursday, heading for a sixth day of declines, following a lower than expected draw on US stockpiles and amid worries Britain might leave the European Union.

Front-month US crude futures CLc1 were down 39 cents, or nearly 1 percent, at $47.62 a barrel at 0142 GMT.

Oil prices have fallen everyday after June 8, losing about 8 percent of their value.

Last week, Brent was at the highest this year, touching almost $53 a barrel, while US crude was near $52 after supply disruptions from producers including Nigeria and Canada.

“Oil looks likely to struggle in the face of concerns that the recent rally was too strong and too fast,” ANZ said in a note.

US crude stocks fell last week, the government said on Wednesday, but the decline was much smaller than anticipated, while gasoline stocks decreased sharply.

Crude inventories USOILC=ECI fell by 933,000 barrels in the last week, the US Energy Information Administration reported, less than half the 2.3 million barrel decrease expected by analysts.

The US Federal Reserve signalled on Wednesday that it still plans two US rate hikes this year despite slower growth expectations, also hitting the oil market.

With a week to go before Britain votes on leaving the European Union, oil and other markets also remain in thrall to opinion polls, which are increasingly showing those supporting an exit are in the majority.

A so-called Brexit will lead to a Europe-wide recession and hit demand for oil, many analysts say.

Brexit is continuing to dominate sentiment, so for the time being data will continue to take a back seat. -Reuters